Market uncertainty is driving customers to Allianz Life Insurance Co. of North America, with sales of annuity products up sharply in the third quarter.

The Minneapolis-based unit of German insurance giant Allianz reported Wednesday that fixed-income annuity sales were up 36 percent from a year earlier at $1.9 billion, while variable-annuity sales nearly quadrupled to $800 million.

Allianz reported $2.9 billion in premium revenue, up 63 percent from a year earlier and 11 percent from the previous quarter.

Marc Olson, Allianz Life's vice president of finance, attributed the performance primarily to general market conditions. "Specifically, we see that consumers continue to be risk averse, and they desire products that provide protection in income. I'd say that this is increasing industry demand overall for the types of products that we offer."

Company President and CEO Gary Bhojwani noted that market shifts away from defined benefit retirement plans toward defined contribution plans such as 401(k)s have transferred "the longevity risk" from employers to workers, causing consumers to seek investments that will last, perhaps for decades.

Allianz Life's assets under management in the quarter grew just over 13 percent to $85 billion from $75 billion a year ago. However, operating profits declined nearly 15 percent in the quarter to $57 million from $67 million, which the company attributed to "the challenging market environment and in particular, low interest rates."

Even so, Bhojwani described the company's business margins and operating profit as "strong."

"We believe that we're positioned with the right product offerings, financial strength and reputation to be successful in our marketplace," Olson said. "Going forward I would say we see growth both in the fixed-annuity channel as well as the variable-annuity channel."

Fixed annuity sales should increase as the company expands to new sales channels, Olson said. The company has traditionally relied on independent agents for fixed-annuity sales.

But he said demand for Allianz Life's indexed annuity products has increased among banks and broker-dealers. "Those are channels that we're in right now on the variable-annuity side, and we see there's an opportunity to grow [fixed annuity sales] in those channels," Olson said.

Allianz Life has about 2,000 employees, mostly in the Twin Cities. It has about 70 open positions and Olson foresees modest additions next year as well.

A company survey this year found that 92 percent of Americans foresee "a retirement crisis" ahead, Olson said. "Sixty-one percent feared outliving income more than death," he added. "Then, if you look to where people are invested, consumers are still heavily invested in cash or bonds, or very safe investments. And we think the annuity products ... are just competitively positioned well against those other conservative investments."

Dan Browning • 612-673-4493